EUs CA Strategy

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EUROPEAN COMMISSION

EXTERNAL RELATIONS DIRECTORATE GENERAL

DIRECTORATE Eastern Europe, Southern Caucasus, Central Asian Republics.

CENTRAL ASIA

DCI INDICATIVE PROGRAMME

2011-2013

CENTRAL ASIA DCI INDICATIVE PROGRAMME


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Country/Region: Central Asia

Budget Years: 2011-2013

Budget Line: 19-10-02

Legal Base: Regulation (EC) n1905/2006

Cost of Order: 321 Million

Programming Service: DG External Relations E/3

Head of unit: Victor Andres Maldonado

Co-ordinator: Pierre Borgoltz


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Table of Contents

Chapter 1: Summary Central Asia DCI Indicative Programme 2011-2013.............................................. 7

1.1 Strategy for assistance to Central Asia 2007-2013 : Mid term review and EU response 7

1.2 Framework and strategic priorities for regional cooperation with Central Asia 9

1.3 Framework and strategic priorities for bilateral assistance in Central Asia 11

1.4 Main priorities, focal sectors and indicative allocations for 2011-2013 13

1.4.1 Promotion of regional cooperation and good neighbourly relations 14

1.4.2. Bilateral Programmes 15

Chapter 2: Promotion of regional cooperation and good neighbourly relations...................................... 17

2.1 Overall objectives of the EU regional co-operation 17

2.2 Description of Priorities and Focal Sectors 18

Focal sector 1: Sustainable regional development 18

Energy 19

Environment 21

Business Cooperation Networks 24Focal sector 2: Education, Science and people-to-people activities 25

Focal sector 3: Rule of law, border management, customs and fight against organised crime 28

Chapter 3: Central Asia national Indicative Programmes 2011-2013..................................................... 31

1. Kazakhstan: National Indicative programme 2011-2013 31

1.1 Strategic Objectives of EU co-operation 31

1.2 Description of the Priorities and Focal sectors 32

Priority Area: Poverty reduction and increasing living standards 32

F l t 1 R i l d l t d l l 32


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Focal sector 1: Social protection reform and income-generating activities 38

Focal sector 2: Education reform 39

Priority Area: Good governance and economic reform 40

Focal sector 3: Judicial reform and the rule of law 40

3. Tajikistan: National Indicative Programme 2011-2013 42

3.1 Strategic Objectives of EU co-operation 423.2 Description of the Priorities and Focal sectors 45


Focal sector 1: Social Protection and employment 45

Focal sector 2: Health sector reform 46


Focal sector 3: Private Sector Development 47

4. Turkmenistan: National Indicative Programme 2011-2013 49


4.2 Description of the Priorities and Focal sectors 50


Focal sector 1: Strengthening economic and social development of rural areas. 50

Focal sector 2: Support to the improvement of human capital development 51


Focal sector 3: Long term sustainable energy development 535. Uzbekistan: Indicative Programme 2011-2013 54


5 2 Description of the Priorities and Focal sectors 56


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CHAPTER 1: SUMMARY CENTRAL ASIA DCIINDICATIVE PROGRAMME 2011-2013

1.1 Strategy for assistance to Central Asia 2007-2013: Mid term review and EU response

The Regional Strategy Paper for Assistance to Central Asia (CA RSP) 2007-2013 coveringKazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan was formally adoptedby the Commission in April 2007. The CA RSP provides the rationale behind the EU responseand the priority areas which have been selected, at both regional and country level,encompassing all EU instruments and programmes.

The adoption by the European Council of a Strategy for a new enhanced partnership withCentral Asia in June 2007 has given impetus to both regional and bilateral dialogue, and hasreinforced EU cooperation with the five countries on major issues facing the region, such aspoverty reduction, sustainable development and stability, which formed the core of theprogramming exercise for 2007-2013. This cooperation can now be pursued at a higher level ofpolitical commitment and impact, particularly with a view to addressing key regional challenges.With EU enlargement, and the new external policies concerning Russia and the neighbouring

states, the countries of Central Asia have become the essential neighbours of the EUNeighbourhood countries, where approximation with EU legal frameworks and economicpolicies has been accelerated. This policy change lends an additional impetus to thedevelopment of Central Asian countries relations with the European Union and thestrengthening of their own sector policies and reform agendas.

As a land-locked region, Central Asia faces numerous challenges in terms of its geographyalone. The countries also share many common issues and problems. In part, this can beattributed to the collapse of the Soviet centralised economy that existed pre-independence andthe subsequent need for nation building and profound economic and political reforms. In part,these shared issues and problems relate to vitally important cross-border trade, migration,water, energy and environmental links all of which require regional cooperation. Mountingcross border crime and threats of terrorism in Central Asia point to grievances at local andnational level that have arisen in response to extensive poverty and unemployment, barriers totrade and business, weak institutions and poor governance in public service and law

enforcement, and authorities that fear opposition, free expression and religious activity. Thesedestabilising factors are further compounded by external influences, such as international drugtrafficking (and other forms of trafficking), and radical Islam.

Against this background, the core objectives of the EU are to help eradicate poverty andincrease standards of living to promote the stability and the security of the countries of the


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Differences between the countries of Central Asia in both the economic and political spherescan present major challenges in terms of the free movement of goods, services and people,and finding joint approaches to solving shared problems.

Greater regional economic cooperation both among the Republics of Central Asia and betweenthem and their neighbouring countries, and particularly with Europe, will be key to theirsustainable socioeconomic development. The strong EU commitment towards its Easternneighbours within the framework of the European Neighbourhood Policy will also bring Europeand Central Asia closer to each other, in terms of both political cooperation and economicdevelopment. The EU can offer experience in regional integration leading to political stability

and prosperity. Equally, a number of issues are most appropriately addressed throughassistance at national level, where lessons learnt from the political and economictransformation of Central and Eastern Europe can also be offered with specific value addedand impact.

The Regional Strategy Paper for Assistance to Central Asia 2007-2013 (CA RSP) defines,consistent with the EU - Central Asia Strategy, a set of three priority areas for assistance toCentral Asia, which together promote the core objectives outlined above. These priority areas

are: 1. Promotion of regional cooperation and good neighbourly relations; 2. Poverty reductionand increasing living standards; and 3. Good governance and economic reform.

The National Annual Action Programmes for assistance to each of the five Central Asian statesare elaborated from the second and third priority areas. In the framework of these priorityareas, three focal sectors have been identified for each country. Focal sectors have beenchosen in response to the particular requirements and policies of each country, with a view tomaximising the effectiveness of the assistance provided and complementing the work of other

main donors. It is worth noting here that the EUs relations with all five Central Asian stateshave the same contractual basis (though the PCA with Turkmenistan is still in the process ofratification) providing a common regional framework for the EUs cooperation with the fiveCentral Asian Republics.

Focal sectors for regional cooperation have been elaborated under priority area 1, Promotionof regional cooperation and good neighbourly relations. These focal sectors are also fully inline with those of the EU Strategy for an enhanced partnership with Central Asia, as well asthe Regional Strategy of the European Neighbourhood and Partnership Instrument (EasternRegional Programme) for 2007-2013 and its cooperation initiatives and programmes, in whichthe countries of Central Asia are invited to participate.

The mid-term review of the CA RSP has demonstrated that the analysis, principal objectivesand priorities for action regarding regional cooperation and bilateral assistance programmes


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adequately covered by EC, or by other donors assistance, but which represent key prioritiesfor the countries of the region and to identify areas for which follow up to previous programmesis required. It was found that recent global, regional and national developments, as well as

evolving EU priorities, were generally well addressed by the CA RSP. Moreover, experience inthe region demonstrates that it is critical to ensure continuity in dialogue and support toselected focal sectors over time in order to achieve sustainable results and ensure the impactof assistance programmes. The existing Strategy for assistance thus remains appropriate,requiring only some minor modifications at the country level in view of recent political andeconomic developments, which are dealt with in the individual country sections below.

The Central Asia Indicative Programme (CA IP) 2011-2013 defines in detail the focus of DCIassistance interventions for each country of the region over the three year period. Coherenceof EU policies and complementarity, both between EU-based programmes and instruments andwith those of other donors, will be pursued in all priority areas. This issue is particularly relevantfor linking the Central Asia Indicative Programme with the EU Strategy for Central Asia adoptedby the EU Council (June 2007), which establishes Central Asia as a strategic priority focus, aswell as with the European Neighbourhood Policy (ENP), especially the relevant ENPI RegionalProgrammes (Eastern Region). Governments, parliaments and civil society in Central Asia

were consulted throughout the mid-term review process, as were other main donors, IFIs andinternational organisations.

1.2 Framework and strategic priorities for Regional cooperation with Central Asia

There is substantial potential for regional cooperation in Central Asia due to the significantinterdependence of its land locked countries, their shared natural resources and commonchallenges that can be tackled most effectively through a regional approach, and by capitalising

on the common goals of partner countries to get closer to the EU. For regional cooperationbetween the EU and its partner states in Central Asia, it is important to operate within specific

joint sector policy dialogue and programming frameworks which ensure political engagement,ownership and effective implementation and coordination among the partner countries atregional level.

Whilst difficulties and tensions amongst the countries of the region remain, a growing sense isemerging among the states of Central Asia that convergence in policies across a number ofareas could yield benefits for all. The EU strategic priority area, promotion of regionalcooperation and good neighbourly relations, is now as valid and important as ever. Recentregional and international events, including the worsening situation in Afghanistan, events inthe South Caucasus, the economic crisis and the ever more urgent need for action on energy,climate change and water issues, have further enhanced the significance of EU cooperation inth Th l t t f th h ll hi h i h tl b d i


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Regional programmes have been useful as multipliers of know-how, for valuable actions andreforms carried out in one national context were often also relevant for another country. Pastexperience has shown the importance of sharing lessons learned and best practices from

countries that are undergoing similar post-communist transitions in terms of facilitating effectivereforms and stimulating convergence. It also remains appropriate that projects andprogrammes for the region continue to be developed on a variable geometry basis, where apartner may choose not to be active. This approach makes also room for specific countrycomponents of a regional assistance project to be tailored to the national context and needsand to respond to requests from Central Asian partners, thereby ensuring ownership andovercoming absorption capacity issues.

With the CA Strategy and ENP, multilateral cooperation frameworks have considerablystrengthened the sector policy dialogues with the EU and brought significant progress in termsof ownership and the scope and results of cooperation activities. EU-CA cooperation at theregional level has been embedded since its early stages in the ENPI regional cooperationprocesses, in particular for energy, transport, education and environment.2 In these priorityareas of mutual interest, the strategic objectives of the Central Asia Strategy operate in synergywith those of the ENPI East Regional Strategy. Regional cooperation with the countries of

Central Asia should thus continue to facilitate their participation in the relevant regionalcooperation mechanisms put in place under the ENPI. Moreover, new platforms of theinitiatives the EU Central Asia Strategy created for enhanced cooperation will make it possibleto better manage any possible country-specific absorption capacity issues. These strong andefficient coordination mechanisms in place will ensure proper links between policy dialogue andproject implementation, as well as ownership by the various stakeholders.

No specific problems were encountered in the MTR process review, and no problems are

foreseen in the implementation of such cooperation programmes in future. Implementation risksmay arise as a result of lack of trust and inward looking national policies. However, the regionaldialogue platforms and cooperation mechanisms which have been established mitigate theserisks, as does the EU flexible approach to the regional projects. The majority of the cooperationschemes financed under regional programmes have already proved their effectiveness. Inaddition, the multi-beneficiary nature of the activities will limit the impact of any country-specificabsorption issues.

Cooperation with IFIs, and especially with EBRD and EIB, constitutes an important contributionto supporting the implementation of regional cooperation, including the facilitation ofinvestments at policy and project level. Following the success of the NeighbourhoodInvestment Facility established to provide grant funding in support of lending operations byEuropean Financial Institutions, the establishment of a similar facility for Central Asia, the


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is increasing the effectiveness of regional cooperation activities in terms of leverage andimpact.

In particular, the EU has considerably increased its cooperation in recent years with theInternational Financial Institutions active in the region, with an overall good result on enhancedcoordination and sharpened focus for better impact of assistance. Cooperation and synergieswith the banks are most developed in the framework of a specific Tripartite MoU EC-EIB-EBRD, covering countries in ENP Eastern Europe, the Caucasus, Russia and Central Asia.Both banks have been closely associated with the MTR process and have had the opportunityto comment on the CA RSP and IP. The EBRD-EIB MoU is also aimed at strengtheningoperational coordination between the two institutions in the above region.

Under the EU Strategy for Central Asia, strengthened mechanisms for coordination have alsobeen established among EU MS, especially as regards the Rule of Law initiative led by Franceand Germany, the Education initiative led by the Commission and the Environment/Water pillarled by Italy. The EU Central Asia Border Security Initiative (CABSI), led by Austria, is alsoserving as a coordination platform for donors and international organisations active in theborder management sector.

Taken together, these various coordination efforts have improved the division of labour amongmajor donors, international organisations and IFIs, both at regional and at bilateral level.

1.3 Framework and strategic priorities for bilateral assistance in Central Asia

Partnership and Cooperation Agreements (PCAs) have been agreed with each of the regionsfive states and constitute the contractual basis for bilateral cooperation.3 The PCAs are builtaround the same two major commitments, namely to align their respective legal frameworkswith that of the EU and to gradually undertake regulatory convergence. Previous EC assistanceprogrammes have been major contributors to the emergence of a new legal order andsocioeconomic framework in the newly independent states, based broadly along the lines of theEU acquis communautaire and international norms and standards. The leaders of Central Asiacontinue to mention the European Union as their point of reference for the political, economic

and social transition reforms of their countries. This specific feature of Central Asia comparedto the other geographic areas and countries covered by the DCI Regulation is reflected by aspecific Article on Central Asia (Article 8), concerning the priority areas of cooperation, whichcomplement the general scope and objectives of this assistance instrument.

Bilateral assistance programmes will be devised for each of the five Central Asian countries


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EU programming was adapted according to the new circumstances, taking into account

vulnerability/resilience and needs assessments carried out by the IFIs, including as part of theassessment for the EC Food Facility. In the near future, the possibilities of co-operation withthe IMF are likely to increase in light of the forthcoming opening of a dedicated CA technicalassistance centre (CASTAC). The policy response of each government to the global economicdownturn was also taken into account. The Mid-term Review (MTR) also considered the impactof strengthened WB sectoral lending facilities and programmatic loans, intended to supportincome generation, social safety nets, modernisation and capacity building programmes andinfrastructure projects. EBRD also stepped up its lending, and at the same time strengthenedits dialogue, cooperation and consultation with the EU.

1.4 Main priorities, focal sectors and indicative allocations for 2011-2013

During the 2011-2013 period covered by this Indicative Programme, a total EU grant of ~ 321million is planned for Central Asia under DCI4, equivalent to an average annual budget of

107m per year (+/- 21 % compared to the previous CA IP 2007-2010). The indicative averageallocation per year to Promotion of regional cooperation and good neighbourly relationsis set at 35 m, while 72 m on average per year is indicatively earmarked for the CA nationalassistance programmes at country level, for the priority areas poverty reduction andincreasing living standards, and good governance and economic reform.

The DCI indicative budget 2011-2013 for CA country bilateral assistance programmes hasbeen allocated by country as follows:5


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Country Annual Average Amounts Percentage

Kazakhstan ~ 10 m/yr 14%

Kyrgyzstan ~ 17 m/yr 24%

Tajikistan ~ 20,7 m/yr 29 %

Turkmenistan ~ 10,3 m/yr 14%Uzbekistan ~ 14 m/yr 19%

100%

1.4.1 Promotion of regional cooperation and good neighbourly relations:

(33% of available DCI -CA financial allocation)

Focal Sectors:

a) Sustainable regional development: energy, environment and business cooperationnetworks

b) Education, Science and People- to- People activities

c) Rule of law, border management, customs, and the fight against organised crime.

Central Asia Regional cooperation: DCI Indicative allocations 2011-2013

Regional Cooperation Programme

Priorities: Focal sectors

Indicative allocations over the period

million


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Focal sector 2: Education, Science and People- to-People activities

45

Focal sector 3: Rule of law, border management,customs and the fight against organised crime

10

TOTAL regional CA 105

(Total Central Asia -regional and bilateralprogrammes ) 321

1.4.2. CA Bilateral Programmes:

(67% of available DCI- CA financial allocations)

1. Priority area: Poverty reduction and increasing living standards

Focal sectors:

a) Agriculture and rural development, regional and local community development

b) Support to social sector reforms

- social protection

- health

- education


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b) Enhanced trade, economic reforms and SMEs development

Central Asia bilateral country programmes: DCI Indicative allocations 2011-13

CA Bilateral Indicative Programmes2 Priorities: Focal Sectors Indicative allocations over the period, million

Kazakhstan

Regional development and local governance 8

Judicial reform 10

Enhancement of public service capabilities for social and economic reforms 12

Total 30

Kyrgyzstan

Social protection reform and income-generating activities 19

Education reform 18

Judicial law and rule of law 14

Total 51

Tajikistan

Social protection and employment 20

Health sector reform 20

Private sector development 16

(* public finance reform / cross-cutting issue) 6

Total 62

Turkmenistan

Strengthening economic and social development of rural areas 9

Support the improvement of human capital development 14

Long term sustainable energy development 8

Total 31


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It should be noted that financial allocations are indicative over the three year period: in case ofserious sector- or country-specific absorption issues, re-allocations could possibly beconsidered within the limits allowed by the relevant legal basis and after agreement between all

EU services concerned.

In summary, total country bilateral allocations are increased by 31% compared to the previousCA IP 2007-2010, while regional allocation is increased by only 4% taking into account thefrontloading of 40m made for CA regional allocations in DCI AAPs 2009/10 to support theimplementation of the EU Strategy for Central Asia.

CHAPTER 2:PROMOTION OF REGIONAL COOPERATION AND GOOD NEIGHBOURLY RELATIONS

2.1 Overall objectives of EU regional co-operation

Improved regional economic cooperation, both among the Republics of Central Asia, andbetween them, their neighbours and the European Union, provides one of the keys to theirsecurity, stability and sustainable socioeconomic development. Several of the challenges facedby Central Asian countries, such as developing regional trading corridors, creating efficientenergy systems and networks, managing river basins and environmental issues, andcombating organised crime and trafficking, are inherently trans-border in character and canonly be tackled effectively through a cooperative effort at regional level.

In this context, the EU Strategy has stressed that a regional approach is suitable for tacklingcommon regional challenges such as organised crime, human, drugs and arms trafficking,terrorism and non-proliferation issues, inter-cultural dialogue, energy, environmental pollution,

water management, migration as well as border management and transport infrastructure. Inthis regard the EU will cooperate with international financial institutions, multilateral andregional organisations and institutions.

The principal objectives of EU regional assistance to the countries of Central Asia are thus fullyin line with the approach set out in the EU Strategy for Central Asia adopted by the EU Council:namely, to provide assistance in order to achieve common objectives in synergy with thosepursued under the bilateral programmes where there is a clear benefit from regional-level

assistance, using the different Community Assistance Instruments, as appropriate, includingDCI Central Asia, DCI Thematic Programmes, Instrument for Stability and others. Thesebenefits result from complementarities and pull effects, as well as from economies of scale andavoiding duplication of effort. They can be of a long-term nature, and include fostering greatercooperation within the region. Central Asia country programmes may also provide support withregard to legislative alignment and sector reform To ensure the impact of regional assistance


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environment and education, are open to the countries of Central Asia, which can benefit fromthe instrument on the basis of Article 27 of the ENPI Regulation.6

For over ten years, the countries of Central Asia have been fully involved in the EC Regionaland Inter-State programmes as equal partners with the other CIS countries, candidatecountries and new EU Member States in strategic areas such as energy, transport,environment and education. They have subscribed to the TRACECA multilateral agreement ontransit and transport, the INOGATE Umbrella Agreement, the EC-supported Environment forEurope Process and the EU Water Initiative for Eastern Europe and Central Asia. They havebeen keen to adapt the reform of their higher education systems to the principles of theBologna Process and in line with the Lisbon Agenda, in particular through the TEMPUS and theERASMUS Mundus programmes and participation in the 7th Framework Programmes forresearch and technological development. All these EU programmes are being given a newimpetus through support for political dialogue mechanisms and new initiatives set up underENP, the Eastern Partnership and the EU Central Asia Strategy. Under the EU Strategy forCentral Asia, two initiatives have been launched on education and the rule of law, and a JointPlatform has been adopted to enhance environment and water cooperation, with the aim ofgiving further impetus to EU cooperation in these areas.

2.2 Description of Priorities and Focal Sectors

Focal sector 1: Sustainable regional development

Comprises three sub-priorities:

- energy

- environment

- business cooperation networks

6 "To ensure the coherence and effectiveness of Community assistance, the Commission may decide when adopting actionprogrammes of the type referred to in Article 12 or the special measures referred to in Article 13, that countries, territories andregions eligible for Community assistance under the Pre-Accession Instrument or the financing instrument for development andeconomic cooperation and the overseas countries and territories associated with the Community are eligible for measures


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Energy

Strategic objectives of EU co-operation

Energy is a crucial area for the economic growth of the countries of Central Asia, which haverequested assistance from the EU. A more secure and efficient energy supply, distribution andpricing policy are essential features for the sustainable economic and social development of theregion.

Lack of energy (e.g. for heating or electricity) exacerbates the situation of poor anddisadvantaged sections of the population in some Central Asian countries. Energy problems

can also contribute to an escalation of tensions between countries in the region, can underminestability and involve direct security risks. There are continuing disagreements between CAcountries over water regulation in the context of hydro-electric power and agriculturalproduction, and concerns in relation to the ecological impact of dams. Electricity and gasdeliveries have been interrupted, including as a means to exert political pressure.

Cooperation with Central Asia on energy is an EU policy priority, which has been highlightedunder the EU Strategy for a New Partnership with Central Asia. Two countries havecomprehensive cooperation with the EU on energy issues via dedicated Memoranda ofUnderstanding. The EU and its Central Asian partners have a common interest instrengthening energy security. Enhanced regional cooperation in the energy sector has beenrecognised as a prerequisite for achieving sustainable economic and social development, aswell as contributing to peace, stability and prosperity in the region. Central Asia partnersparticipate in the Baku Initiative for cooperation between the Black Sea, South Caucasus andCaspian regions. They also participate in INOGATE, the EU assistance programme which

supports the implementation of the Baku Initiative roadmap adopted by the Energy Ministersin Astana (in December 2006) around the following core objectives:

Approximation of legal and technical standards with a view to the creation of a functioningintegrated energy market in accordance with EU and international legal and regulatoryframeworks.

Enhancement of the safety and security of energy supplies. Improvement of energy supply and demand management through the integration of

efficient and sustainable energy systems, in particular through the promotion of energyefficiency and renewable sources of energy. Promotion of financing of commercially and environmentally viable energy projects of

common interest.

The EUs interest in increasing the share of Central Asian sources in its energy supply is also a


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energy sources and demand side management, 2) convergence of energy markets,governance, regulatory frameworks and standards, 3) enhancing energy security by addressingthe issues of energy exports/imports, supply diversification, energy transport/transmission,

transit and energy demand management, 4) facilitating investment, modernisation andtechnology transfer in the energy sector. In this context, strengthening energy related capacityand governance as well as supporting the development of new environmentally andeconomically viable systems is likely to be important. It is also planned to contribute to therealisation of these objectives by leveraging investments of the European DevelopmentFinancial Institutions through the planned Central Asia Investment Facility.

a) Long-term impact

Improved and more sustainable use and management of energy resources (includingwater), contributing to the consolidation of long-term development prospects.

Improved further integration of the regional energy market in line with EU and internationallegal and regulatory frameworks.

b) Specific objectives

Strengthen, by means of multi-country activities, the regulatory, policy and institutionalframework in partner countries in line with relevant EU legal and regulatory frameworks.

Improve energy supply and demand management through the gradual regional integrationof efficient and sustainable energy systems, as well as measures to promote thediversification of the sources and destinations of energy supplies, including towards theEU.

Improve energy efficiency and expand use of renewable resources. Enhance the safety and security of energy supply through the extension and modernisation

of the existing infrastructure as well as the development of new infrastructure, with aparticular focus on improving national and trans-boundary network connections, includingwith regard to the Southern Corridor development.

Gradual integration of CA and ENPI energy markets with the EU energy markets. Contribute where appropriate to the implementation of the Memoranda of Understanding in

the field of Energy.

c) Expected results

Improved energy management and infrastructure. Increased operational safety and reliability of energy transport infrastructure, and a

reduction in the environmental impact of energy and its transport systems. Implementation of modern operation monitoring systems and enhanced statistical data. Gradual approximation of the regulatory and policy framework in partner countries with that


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Specific objectives level

Progress in reforms in the energy sector (e.g. policies, regulation, legislation).

Improvement in energy efficiency levels by comparison with baseline measurementsin 2010. Increased trade, investment, technology transfers and diversification of sources in the

region and with the EU. Increased IFI financing of commercially and environmentally viable investments. Renewable energy policies developed at national level. Number of sustainable energy action plans adopted at the local level (by cities having

signed up to the Covenant of Mayors). Progress where appropriate in the implementation of the Memoranda of

Understanding in the field of Energy.

Environment


Environmental protection, including water issues, climate change remediation and adaptation,pollution control, and the sustainable management of natural resources are key issues for theregion. Action in the environmental field in Central Asia can also bring significant economic andsocial benefits in terms of poverty reduction and the attainment of some of the MillenniumDevelopment Goals (MDGs).

Central Asia is particularly vulnerable to climate change effects, and the adoption of long term

strategies to mitigate global warming, as well as accession to related multilateral instruments,will be very important in the region. The specificities of Central Asia also demand effective andsustainable water resource management as a matter of vital importance, and particularattention should continue to be paid to strengthening cooperation on the rational, efficient andsustainable use of hydraulic, hydro-energy and fuel resources as well as environmentalmanagement. Environmental integration is key to good environmental governance in effectivelytackling these various environmental and resource challenges.

The level of cooperation between the EU and Central Asia has been enhanced, in keeping withincreasing concerns over the ecological situation of Central Asia. With the adoption of a jointplatform for cooperation at the 3rd EU-CA High-Level Conference on environment and water(Rome, 5-6 November 2009), the EU and its Central Asian partners agreed to focus onstrengthening environmental integration and environmental governance, dealing with climate


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framework of the EUWI EECCA. Promotion and leverage of IFI investment in the above sectorswill contribute to impact and results.

Awareness raising and regional and sub-regional cooperation between civil society groups isalso particularly important in the environmental sector and should be promoted, encouragingthe broader involvement of social actors and civil society organisations, and building on thework of existing regional mechanisms, such as the Regional Environmental Centre for CentralAsia.

a) Long-term impact

Improve the sustainable use and management of natural resources including water, marineresources, biodiversity conservation, and measures to prevent land degradation.

Reduce the impact of climate change. Increased regional environmental cooperation and awareness, facilitated by regional

convergence in relevant policy.


To strengthen the EU-CA Platform for Environment and Water Cooperation, as part of theEU Strategy for Central Asia.

To strengthen environmental governance to promote environmental protection. To further promote activities related to mitigation of, and adaptation to climate change.7 To support the regional aspects of the EU Water Initiative, in close collaboration with the

existing regional institutions responsible for water matters, addressing:o Integrated water management and cross-border river management, and

cooperation on regional seas.o Reforms of water supply and sanitation policy.

Strengthening the capacities to ensure access to environmental information, to involverelevant stakeholders in environmental decision-making on reporting and on conductingEIAs and SEAs in line with the Espoo and Aarhus Conventions and their Protocols.Convergence with the EU acquis on these matters will be promoted.

c) Expected results

Reinforced policy dialogue with the EU on environmental and water issues. Improved implementation, monitoring and reporting on the UNFCCC, Kyoto Protocol and

its expected successor agreement and mechanisms. Preparation of adaption strategies and planning and implementation of a low carbon

development strategy.E h d ith th EU i i t di h


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Improved capacities for the preparation and use of high-quality environment assessmentsto support decision-making.

Facilitation of policy development and implementation of strategies in various environmentsub-sectors.

The implementation of the EU Water Initiative and related goals of the Central AsianInitiative on Sustainable Development, including the MDGs targets related to environmentalsustainability (Goal 7).

Strengthened water resource management, including cross border river basinmanagement, and improved capacities of regional institutions responsible for watermatters.

Increased biodiversity conservation, nature protection and measures to avert landdegradation in the context of adaptation to climate change.

Increased environmental awareness and civil society cooperation, includingimplementation of the Aarhus Convention.

Improved cooperation on environmental data collection, monitoring and assessment. Disaster risk reduction actions are mainstreamed in development cooperation programmes

as appropriate.

d) Indicators of achievement

Long term objectives level

Better strategic planning and implementation in the fields of water quality andmanagement, pollution, nature protection and soils.

Progress on adaptation to climate change and on sectoral approaches to climateissues.

Increased regional environmental cooperation and awareness around climate changemitigation and adaption.

Availability of a gap analysis for convergence with EU legislation on strategicenvironmental assessment (SEA), environmental impact assessment (EIA), access toinformation, public participation and reporting.

Specific objectives level Improvement of the production and use of indicators at national and regional level. Number of national and regional environment information systems, linked and in line

with the EUs SEIS. Steps taken to implement the UNFCCC, Kyoto Protocol and its expected successor


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Development of water resource management plans, establishment of trans-boundaryriver management mechanisms and increased cooperation on regional seas, as well asa reduction of water losses

Climate change remediation and adaptation action plan adapted and measuresimplemented.

Increased awareness of regional environmental issues. Compliance with multilateral agreements. Number of disaster risk reduction actions integrated in development cooperation

operations.

Business Cooperation Networks


For most countries in the region, the deterioration of the global economic environment has ledto a significant reduction in domestic and international demand, investment, and hence to theslowdown of growth. The fragility of the banking system in some countries injects an additionalfactor of vulnerability. The private sector will be important in restoring economic growth andproviding employment for the growing population. SME development in this context isparticularly important because of its potential to promote local economic development and jobcreation. Throughout the region, improving the business climate will be a stimulus for SMEdevelopment. Giving SMEs access to cost effective advisory services can assist them inimproving their management and operations and help them find customers and partners in theregion and the EU. In this context, it is important to promote regional networks to addressissues of mutual interest for regional and international trade among relevant stakeholders

(these may include chambers of commerce, SME associations, business and trade servicesproviders, standards agencies and others).

Better access to European markets, and increased foreign investment opportunities can offerthe possibility of sustainable economic development in Central Asian partner countries. Thefacilitation of business services and regional networks of SMEs between EU and Central Asiawill allow a mutually beneficial exchange of information, and thereby facilitate the developmentof an improved business climate and enhanced foreign direct investment, transfer of

technology and export opportunities throughout the wider region.

a) Long-term impact

Promotion of SME development in Central Asia and links with the EU. Improving the business climate in Central Asia.


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Development of closer linkages between SME businesses in the EU, ENPI and CentralAsian countries, sustainable partnerships and relations between them, supporting theexchange of experience and best practices

Functioning networks of SMEs. Improved access to quality advisory services for SMEs. Enhanced foreign direct investment prospects and export capabilities, particularly for

SMEs.


Long-term impact level

Enhanced foreign direct investment and export opportunities in the region. An improved business climate.


Networks to support CA private sector development. Support to CA regional cooperation mechanisms for economic integration (covering, for

instance, statistics, standards and legal frameworks for trade and investment).

Regional mechanism(s) to bring together EU and partner countries businesses forcooperation and technology transfer. Increased profitability and business turnover of selected SMEs. Number of new contacts for SMEs.

Focal sector 2: Education, Science and people-to-people activities


The continued degradation of the education systems in Central Asia, including vocational andhigher education, has had a negative impact on the quality of education at all levels. It has alsoexacerbated the mismatch between education and training on the one hand and the needs oflabour markets and employment on the other. Resolving these issues will be essential for theimplementation of CA countries poverty reduction/social welfare improvement strategies. The

demand by CA partners for the EU to strengthen its cooperation in this field remains very high,including for vocational education and training. CA requests for assistance to gradually bringtheir education systems in line with the Bologna process and the EUs higher educationmodernisation agenda are also of particular strategic importance. Training of faculty staff andgraduates is part and parcel of a comprehensive approach to adjust education to marketeconomy requirements and upgrade knowledge and competencies to face the sustainable


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in higher education. By strengthening higher education institutions, Tempus also contributes totheir capacity to take part in the EU Research Framework Programme. In all such activities,gender balance should be ensured. Another recent initiative is the Central Asian Research and

Education Network (CAREN), the aim of which is to narrow the digital divide and contribute tothe modernisation of the education and research sector in the region. CAREN will also assist inbuilding the capacity of higher education and research institutions to take part in the 7 thFramework Programme and increase their involvement with the European Research Area.

The EU and its Member States have set up a European Education Initiative for Central Asia inorder to help the education systems of Central Asian states adapt to the needs of theglobalised world. A regional approach leading to the emergence of a harmonised regional

education area is also highlighted as an important issue for the future sustainable developmentof the countries of the region, particularly in view of the sizeable flows of migrant workers.

a) Long-term impact

Contributing to the emergence of an upgraded education system adapted to therequirements of a market economy and the development challenges facing the region.

Increased educational and research cooperation within the region and with the EU,including in the fields of science and technology.

Increased trans-boundary, people-to-people contacts.b) Specific objectives

Enhance the quality of higher education provision in partner countries, particularly in termsof curriculum development, teaching methods and human resource development, aimingat, inter alia, a closer match to the demands of the economy and labour market.

Develop higher education teaching and learning capacity in partner countries, notablythrough enabling talented students from partner countries to study in the EU and topromote EU values and enhancing staff capacity for international cooperation..

Promote cooperation between higher education institutions in the EU and within the partnercountries, thereby encouraging the transfer of know-how with a view to stimulatingacademic development and upgrading education including, possibly, through the setting upof a network for European Studies in Central Asia.

Improve university governance, including transparency of education assessment. Support the acquisition of management skills by academic and administrative staff,

ensuring a balance between institutions growing autonomy and the need for greaterfinancial sustainability.

Increase access to high capacity communication networks, foster the exchange ofinformation between the research and education communities in Central Asia and increase


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A high-profile scholarship programme with balanced participation of women and men withregard to countries, subjects and social origins, delivering sustainable results in terms ofmutual understanding, reinforcement of the capacity partner institutions and the links

between institutions of higher education in the EU and partner countries. 400 scholarships starting each year through Erasmus Mundus/Action 2, selected on the

basis of a transparent process. Students and scholars returning to their home region, with improved employability and

understanding of the EU. Establishment and reinforcement of institutional linkages between higher education

institutions and links between EU/CA scientific and research communities, including

through an increased number of successful applications to the 7th

FrameworkProgrammes. Improved access to high capacity internet connections for the research and education

community in Central Asia.


Long term impact level

Improved education systems across the region, better able to respond to economicdemands and current development challenges.

Increased levels of cooperation in education, technology and science within the region andwith the EU, reflecting an enhanced mutual understanding and shared values.

Progress in convergence with the Bologna process objectives( as evidenced eventually byBologna scoreboards)


Improved higher and technical education and training systems, to be judged in terms ofquality, teaching methods, access and assessment transparency, social and enrolmentindicators, capacity and employability, as well as level of convergence with EU practicesand standards.

Utilisation of European high education quality tools by partner countries (ESG). Improved governance/management of educational institutions (quality assurance, social

partnership, financing , etc.). . Number of students enrolling in courses developed with Tempus support; Graduates success rate on the labour market. Number of supported multi-country partnerships, and EU CA academic and scientific

networks, such a network for European Studies in Central Asia .


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Focal sector 3: Rule of law, border management, customs and the fight againstorganised crime


Central Asian states face continued challenges in managing their borders and the movement ofpeople and goods across them. The principles of integrated border management have proveneffective in ensuring transparent but secure borders. There is potential for enabling sustainablecooperation mechanisms among the CA countries by applying shared principles for bordermanagement, which deliver economies of scale for certain activities such as legalapproximation and training. The region is a key trafficking route for arms, illegal drugs andhuman beings. Addressing these issues requires intervention at national level to improveexisting legal and judicial frameworks, tackle corruption and improve border management.Progress in this sector can also be promoted through closer coordination between lawenforcement bodies in-country, based on concepts of integrated border management.Enhanced cooperation at regional level in the fields of migration and asylum, and combatingorganised crime, including trafficking and related police/judicial reform, is an essentialcomplement to this, providing the capacity to cope with issues of major trans-border

dimensions in line with the EU approach.

In the EU Drugs Action Plan 2009-2012, special importance is given to improving cooperationwith Central Asia regarding the reduction both of the demand for drugs and of drug supply.Third country drug policies and interventions are unlikely to succeed without a comprehensive,balanced and integrated approach. Such an approach includes actions to reduce demand andsupply that combine a proportionate response and respect for human rights. The highincidence of intravenous drug use associated with opiate addiction has contributed to the rapid

increase in the number of HIV/AIDS cases in the region. The 2009-2013 Action Plan on Drugsbetween the EU and Central Asian States, adopted in May 2009, sets out guidelines for actionand enhanced efficient cooperation between the EU and Central Asia. EU assistance will buildon existing programmes such as BOMCA and CADAP, while promoting best use of EU MSexpertise and know-how in these areas.

The EU Central Asia Border Security Initiative (CABSI) led by Austria also provides for even

closer regional policy dialogue and cooperation in the area of border management, whileserving as a coordination platform for donors and relevant international organisations. Thisforum will thus contribute to the strengthening and improvement of the regional cooperationmechanisms among the beneficiary countries.

In response to suggestions put forward by the Central Asian States the EU has developed a


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The gradual adoption of EU best practice in the field of drugs policy. Fostering the improved application of the rule of law, the independence of the judiciary and

the protection of human rights.


Build up appropriate operational and institutional capacity (through national- and regional-level activities) to ensure effective border control and surveillance and to combat border-related corruption, with a view to improving security, combating smuggling and humantrafficking and facilitating mobility of persons and transportation of goods across borders.

Improve transnational cooperation on border management, networking and exchange ofinformation among partners and EUMS on IBM.

Help partners in the region to harmonise and simplify border management rules and adoptbest practices, in line with EU IBM standards.

Align customs with internationally recognized standards, including the implementation ofEU and international standards to ensure security of the international supply chain(Customs Blueprints and WCO Framework of Standards).

Enhance regional cooperation and exchange of information and experience across borderswithin the region as well with EUMS, Europol and Interpol.

Adopt comprehensive drug strategies and action plans on drug demand and supplyreduction, in line with the EU Drugs Strategy, supported by efforts to develop a betterunderstanding of the drug trafficking and drug abuse situation in Central Asia.

Combatting illicit trafficking in drugs, and human beings., Ensure that law enforcement agencies operate in such a way as to uphold the rule of law

and respect for human rights. Support judicial systems in dealing with drugs issues.

Ensure better protection of IPR (Intellectual Property Rights). Support the implementation of the Rule of Law Initiative at regional level in the framework

of the EU Central Asia Strategy.

c) Expected results

Greater harmonization of procedures at regional level and gradual adoption of EU bestpractice, including with regard to integrated border management principles, the fightagainst organised crime and anti-drugs related legislation.

Enhanced border and migration management cooperation and systems, increased tradeflows and more effective combatting of illicit trafficking through increased regionalcooperation; effective transposition and implementation of relevant UN Conventions.

Institutional and operational capacity of border, customs, law enforcement authorities andjudicial bodies enhanced, including through improved inter-agency coordination.


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Reduced corruption among law enforcement, judicial and government personnel. Strengthened cooperation between partner countries and EU operational structures such

as Europol, Eurojust, EMCDDA, ECDC, as well as regional and international structures

such as the Central Asia Regional Information and Coordination Centre (CARICC), Interpoland World Customs Organisation.

Adoption of comprehensive national plans to fight drugs (addiction, prevention andrehabilitation) with support to judicial systems in dealing with drug issues; monitoring andresponsive policy measures drawing on EU experience and leading to reductions in therates of drug addiction and related problems; the adoption of modern treatment methodsfor drugs and related health problems targeting high risk groups, including in detentioncentres.

Convergence in core legal and judicial reforms throughout the region, facilitating crossborder administrative cooperation.

Harmonised training and qualifications for the legal professions.d) Indicators of achievement


More effective and safer frontier crossings operating on IBM principles, leading toincreased trade flows and more effective combating of trans-border crime. Positive assessments/progress reports by the EU and other donors concerning the

situation relating to the rule of law and judicial reform.


Reduction of passenger and vehicle delays and costs at border crossings; improvedtrade.

Trans-border operational cooperation mechanisms established. Exchange of expertise and coordination among the partners on their IBM strategies

and action plans. Number of border crossing points working on the basis of the National Integrated

border management strategy and action plan. Greater capacity to deal with migration/asylum issues; establishment of transparent

migration legal and monitoring systems.

Increased rate of detection of illegal immigrants and traffickers, and number ofsmugglers and traffickers of human beings prosecuted; increased rate of detection offinancial crime.

Effective legal system and operating procedures enabling different law enforcementand judiciary agencies to successfully break up organized crimeR d ti i b f d ddi t d HIV/AIDS ff ti h bilit ti


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CHAPTER 3:CENTRAL ASIA NATIONAL INDICATIVE PROGRAMMES 2011-2013

1. Kazakhstan: National Indicative programme 2011-2013

1.1 Strategic Objectives of EU co-operation

In recent years, Kazakhstan has endeavoured, with some success, to implement a programmeof economic, social and political reforms. Kazakhstans economy is driven by the hydrocarbonsector, and there are significant disparities in income levels and between the central andperipheral regions. The main challenges continue to be the modernisation of the publicadministration, developing good governance, including at the local level, diversification of the

economy and social sector reform.

These challenges are reflected in the governments strategies, which aim to achievesustainable development for the country. The EU plays an important role as the main tradingand investment partner for Kazakhstan, and has recently been involved in helping the countryto implement its reform agenda. In 2008, in order to underpin the objective of furtherstrengthening its links with the EU, the Government of Kazakhstan, at the request of PresidentNazarbayev, adopted the Path to Europe Programme, to be implemented in the period 2009-

2011. The aims of the programme aims are to promote economic cooperation, moderniseKazakhstans economy and administration and develop a strategic vision for Kazakhstanschairmanship of the OSCE in 2010. The programme expresses the intention to bringKazakhstan to a new level of partnership with leading European countries in the areas oftechnology, power/engineering, transport, technical control/metrology, trade/economy, SMEs,environment and quality of life. At the Cooperation Council meeting of November 2009, the EUand Kazakhstan agreed to further strengthen their bilateral relations. The two sides adopted a

Joint Declaration calling for the review of the 1999 PCA, with the aim of updating the presentprovisions or establishing a new agreement.

Strengthening of local governance in Kazakhstan and support to regional development arecrucial to achieving sustainable development for the country, the modernisation of peripheralregions and a decrease in disparities between the rural and urban areas of Kazakhstan. In2008, the government confirmed that the reduction of income differences between regions andwithin each region will constitute a central objective of its reform policy for the country in the

coming period. It has begun to draft a regional policy, making reference to the EU approachand the experience of structural funds. The strengthening of institutions and administrativecapacities at the local and regional levels will be a core task in terms of enabling theimplementation of planned reforms, as will the adaptation of the legal framework of regionaland municipal entities in order to ensure the delivery of public services on a sustainable basis.


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The reform of public administration is key to the project of further modernisation of the countryand to the success of reforms across the various sectors. Kazakhstan has recently shown aninterest in closer cooperation with the EU in this field. The main objective for the Commission

will be to continue its assistance in support of the modernisation and efficiency of publicadministration in the country through technical cooperation, capacity-building programmes,sharing best practice and promoting EU standards. The focus on continued support for regionaldevelopment policy aimed at reducing disparities throughout the country will be maintained,including the strengthening of local Oblast authorities.

Strengthening state institutions is also crucial for creating a favourable environment forsocioeconomic development, and in particular for improving the implementation of key reforms

on economic regulatory frameworks (e.g. diversification, investments and SMEs, public utilities,competition policy, energy, environment, transport etc.), as well as for improving the socialsectors, which the government of Kazakhstan plans to upgrade with EU assistance. To giveone example: the State Health Care Reform and Development Program adopted byKazakhstan for 2005-2010 has set ambitious targets for modernisation which have not yet beenachieved. Persistent high rates of tuberculosis, as well as high indicators of infant and childdeath rates, and lower-than-average life expectancy continue to pose major challenges toKazakhstan's current health system. Similarly, the government is drafting a national strategy foradaptation to climate change and environmental integration, in order to respond to thechallenges of achieving a sustainable environment. .

Therefore, the principal objectives and focal priorities for cooperation with Kazakhstan underthe CA Regional Strategy Paper for the period 2011-2013 remain adequate and do not requireany major change. It is critical to ensure a qualitative development in assistance to selectedfocal sectors, in order maximize the impact of EU assistance.

The Commission will aimthrough technical assistance, sharing of best practice, capacity-building and institutional partnership-like activities with EU partnersto help Kazakhstanachieve approximation with EU standards in the fields mentioned above and ensure effectiveimplementation. Special attention will be paid to MoUs with the EU on Environmental Policy,Energy and Transport .

The priorities set out in this National Indicative Programme will be underpinned and supported

by the results of research and development. In this regard, Kazakhstan is encouraged toincrease investment and capacity in research and development, in particular throughinvolvement of Kazakh research entities in the 7 th Framework Programmes (FP7)8.

Policy Advice and Dialogue programmes will continue to provide assistance in various prioritysectors incl ding the j diciar macro economic polic health c stoms and ta ation energ


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Supporting democracy by encouraging greater participation by local communities in thepolitical and economic decisions affecting them.

Contributing to achieving the sustainable development of Kazakhstan, the modernisation ofperipheral regions and a reduction in disparities between the rural and urban parts of thecountry.

Institutionalised dialogue among the relevant stakeholders to enable sustainableenvironmental, economic and social development in the regions.

Enhanced living standards and improved welfare in the rural areas.b) Specific objectives

To assist in the elaboration and formulation of national administrative reform concepts tostrengthen local self-government bodies in line with European standards.

To assist in adapting the legal framework of regional and municipal entities in order toensure improved quality, transparency and efficiency of services provided by the publicadministration.

To strengthen institutions and administrative capacities at the local and regional levels,consistent with the standards set out in the European Charter of Local Self-Government.

To assist in establishing policy instruments aimed at encouraging the development of localeconomic activities, job creation, etc.

To assist in promoting the development of local economic activities, the creation of jobsand the matching of skills to the demands of the labour market.

To contribute to the improvement of local environmental conditions which affect livingconditions.

To support mechanisms which enhance the participation of civil society in local decisionmaking.

c) Expected results Improved economic development of the selected regions and municipalities. Improved administrative capacities for regional planning, and for the delivery and quality of

local public services. Improved local environmental conditions. Effective and efficient public finance management in the regions, including internal control

and external audit. Promotion of economic opportunities, SMEs, vocational training and requalification of

workers. Strengthened structures of local self-governance evidenced through better management of

local authorities and better representation and oversight by citizens of their localauthorities, measured by means of donor reports, surveys among civil society structures


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Rise in living standards in less developed regions of the country. Economic diversification and increase in income generating opportunities at regional

level. Enhanced cooperation between governmental and non-governmental stakeholders,e.g. education, media, professional associations, chambers of commerce, trade

unions, environment, etc., through civil society cooperation and mechanismsestablished.

Specific objectives level:

Adoption of regional development plans and related supporting measures. Strengthened economic, income-generation and job-creation components in local

development programmes. Improved quality of local governance. Increased access to social services in local communities. Evidence of strengthened public participation processes seen, for example, in case

studies of major infrastructure projects.

Priority Area: Good governance and economic reform

Focal sector 2: Judicial reform

a) Long-term impact

Strengthening of democratic structures and separation of institutional powers. Strengthening of the rule of law and independence of the judiciary. Contributing to the better protection of human rights and fundamental freedoms. Contributing to the effective fight against corruption. Improving governance at local level (decentralized).b) Specific objectives

To assist in strengthening the Ombudsmans Office. To support the strengthening of institutions in the judicial sector. To contribute to the improvement of the capacities in the judicial sector through training of

judges, seminars for professionals, study visits and sharing of best practice. To contribute to reforms in the sector, e.g. regarding the prison system, the juvenile justice

system, etc. To provide advice on corporate law development. To support the reform of penal justice, the prison system, including implementing habeas

d d i i d t ti t i d ith E t d d


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Establishment of efficient forensic centres in Kazakhstan.Indicators of achievement


Strengthened rule of law and improved governance. Improved conditions in the penitentiary system. Better protection of human rights. Easier access of citizens to the judiciary institutions and the Ombudsmans Office. Increased trust of citizens in the judiciary and law-enforcement authorities.Specific objectives level Strengthened judicial institutions, including those providing defence of citizens' rights. Higher levels of independence demonstrated by surveys of lawyers and litigators, and

enhanced administrative capacities of the judiciary. Raising awareness of international justice standards, including EU standards, among the

judiciary, penitentiary personnel and other stakeholders. Better protection of human rights and improved conditions of detention in the penitentiary

system.

Focal sector 3: Enhancement of public service capabilities for social and economicreforms

a) Long-term impact

Sustainable social and economic policies put in place, including through increasedconvergence with the EU.

Achievement of the Millennium Development Goals. Quality of public service enhanced. Improved quality and efficiency of public administration for economic and social policies. Enhanced diversification and sustainable competitiveness of the economy.b) Specific objectives

Increased legal and regulatory convergence with the EU and strengthening ofadministrative capacity in specific economic and social sectors, such as fiscal policies,competition, investment, taxation and customs reforms, energy, environment, transport andhealth and social welfare. This includes implementation of the Energy and Transport MoUs.

Assistance with the adoption of EU and international standards in terms of the legal andregulatory framework for business energy environment transport and social sectors in


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Improved regulations regarding trade, customs and taxation, investment, economicdiversification, SMEs, including technical and sanitary and phyto-sanitary norms,standards, conformity assessment.

Institutional development of public administration supported and civil service managementmodernized. Standards and quality of public services improved, in particular social and health services,

and disparities in provision between centre and regions reduced. Social protection of socially disadvantaged groups enhanced.d) Indicators of achievement

Long-term impact level: Quality and sustainability of social and economic policies. Increased level of regulatory convergence in key sectors as assessed by the EU. Improved working methods and governance of public administration and services for

effective planning and implementation of reforms. Improved employment and social situation, as demonstrated by data on job creation,

provision of social services.

Successful progress on benchmarking for specific sector reforms, e.g. on implementationof relevant State programmes for instance the State Programme on Health Care Reformand Development (2005-2010), State programme on environment and climate change, andenergy, and relevant components of the Presidential programme Path to Europe.

Specific objectives level:

Sector specific regulatory reforms adopted in line with EU legal frameworks. Evidence (from statistics, IFI and OECD surveys etc.) that administrative reform efforts as

regards trade, business climate, competition and investment policy making haveprogressed.

Improved results on attainment of MDGs as reported in national statistics, including targetsrelated to sustainable development, water and environmental governance.

Improved efficiency and overall performance in implementing specific economic reforms bythe state bodies.

Public sector reform efforts implemented effectively. Quality and coverage of the social welfare and health care sector improved. Improved performance and modernized financing system of the social welfare and health

care sector. Indicators of social service delivery improved (e.g. improved quality of medical services as

demonstrated by surveys and assessments; improved quality of the local medical centres,


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As the effects of the global economic crisis make themselves felt, 2009-2010 will be verydifficultyears for the Kyrgyz economy. Economic growth in the Kyrgyz Republic is expected toslow dramatically, from 7.5 % in 2008 to 2 % in 2009. The main economic concerns in 2009 are

related to the curtailing of the inflow of foreign capital, the deceleration of growth in Russia andKazakhstan which signifies a possible decline in remittances from Kyrgyz labour migrants(remittances account for 25% of GDP and 90% is sent home by migrants working in Russiaand Kazakhstan) as well as the decline in exports (as Russia and Kazakhstan account for 40%of Kyrgyz exports) could have a serious impact. In addition, the National Bank of Kyrgyzstannoted that fiscal policy in 2009 will also be hampered by higher energy prices, unemployment,a drastic restriction in global lending, and uncertainty over food supplies. The slowdown ineconomic growth, especially in trade, combined with an incisive tax reform which entered into

force on 01/01/2009, is causing government revenues to fall sharply.

Kyrgyzstans Country Development Strategy 2009-2011 was approved in May 2009, afterconsultations with governmental bodies, civil society, donors and the business community. TheEC, along with Sweden and Germany, declared its commitment to participate in the JointCountry Support Strategy process (JCSS) at the Kyrgyz Development Forum in May 2007,following which the focal sectors for EU intervention were identified in coordination with otherdonors programmes.

In providing support to the JCSS, the EU is following the approach adopted by other majordonors, and dealing with poverty reduction and enhancing living standards concurrently at twolevels: firstly, at central government level, through support to sector reform programmes forsocial protection, and secondly, at local level, to help extend and modernise local infrastructure,promote productive employment and education, and improve social protection and the qualityof social services.

The objectives of EU assistance over the period covered by the Regional Strategy remain fullyappropriate and there is a critical need to ensure their continuity. Priority areas and focalsectors remain fully relevant in the context outlined above. They are instrumental for thesustainable development and further reform of a landlocked, low-income country likeKyrgyzstan.

As identified in the strategy document, poverty reduction and increasing living standards

therefore remain key objectives for the EU NIP. The Country Development Strategyemphasizes in particular that social protection measures must be made more effective and bebetter targeted at poorer families. Support for social protection reforms is also instrumental intackling the effects of the global financial crisis and soaring food and energy prices. It isessential for the sustainability of the EU assistance that continuity and building on the results

l d hi d d S t t f i t d t ti i l di th h


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Judicial reform and the fight against corruption are among the priorities of the CountryDevelopment Strategy. The Kyrgyz authorities have declared their intention to undertakefurther judicial and legal reform. There is a need for continued support to rule of law and

judicial reforms. It will contribute to the strengthening of democracy and the rule of law and tothe protection of human rights and fundamental freedoms, as well as combating corruption.The fight against corruption through efficient and transparent public administration will involvecross cutting measures in the social protection and education sectors.

2.2 Description of the Priorities and Focal sectors

Priority Area: Poverty reduction and increasing living standards

Focal sector 1: Social protection reform and income-generating activities

a) Long-term impact

To contribute to the development, implementation and monitoring of effective povertyreduction, improving living standards and ensuring access to social welfare services forthe poor.


Improvement of targeting of social assistance transfers. Reform of the existing system of social welfare privileges based on a categorical approach

into a system which targets the most vulnerable, taking into account the income and theneeds of citizens.

Improvement of social welfare services. Infrastructure rehabilitation and development of rural income generation activities for

improved living standards in the poorest communities.

c) Expected results

Improved capacity of the authorities to efficiently carry through social welfare reforms andprogrammes aimed at the most vulnerable sectors of the population, including in theregions.

Sector-specific social protection reform measures carried out in line with the governmentssector reform programme, priorities and detailed strategies.

Enhanced administrative capacities in relevant sector ministries and state structures toensure national ownership and effective enforcement to guarantee access of the mostvulnerable groups to social welfare benefits


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Number of measures for sector specific social protection reform implemented.Achievement of target sets in the social welfare programmes; improved and regular

delivery of social welfare services in all provinces. Increased administrative capacity of line Ministries to plan and implement sector-

specific reforms. Increased income level of socially disadvantaged groups. Increased development of skills and human resources of the rural population. Increased quality and efficiency in social protection services delivered to target groups;

performance indicators for the sector concerned; progress on MDGs.

Percentage of arrears in financing social benefits, especially in remote regions.Focal sector 2: Education reform

a) Long-term impact

The establishment of an effective system of education that will facilitate sustainabledevelopment, economic growth and competitiveness within the global economy, therebycontributing to social stability in the country.


Improve the capacity and efficiency of the authorities to carry out the education systemreform and increase the budget spending efficiency.

Improve quality and effectiveness of the education system, including vocational education,and enhance qualification of teachers for primary and secondary schools.

Increase the linkage between education and the needs of the labour market, payingparticular attention to regional differences.

c) Expected results

Improved quality, capacities, accountability and good governance of education and trainingsystems.

Teachers careers and training reformed in line with modern standards. Enhanced quality of intermediate vocational training, including through the development of

specific skills for the services sector. Increased prestige of intermediate vocational training among young people.d) Indicators of achievement



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Improved quality and transparency of the examination systems and objectiveassessment of students (national standard tests) by 2015.

Raising teachers salary level to the average salary in the country by 2015. Education facilities and training courses updated in the light of skills/competenciesidentified at enterprise level; increase in the number of education institutions with

modular education systems and professional standards devised together withemployers (30% by 2015).

Doubling of the percentage of graduates with employment contracts concludedbetween educational institutions and employers organizations by the year 2015.

Increase in the number of VET school graduates as compared to University graduates.Number of education centres modernized.

Increased involvement of Kyrgyz research entities in the 7th Framework Programmes,as demonstrated by a greater number of successful research proposals.

Priority Area: Good governance and economic reform

Focal sector 3: Judicial reform and the rule of law

a) Long-term impact

Improve the application of the rule of law, the independence of the judiciary and theprotection of human rights and fundamental freedoms, as well as combating corruption.

Improve the functioning of the judiciary, Ombudsman and Parliament.b) Specific objectives

Strengthen the independence, effectiveness, administrative capacity and training of thejudiciary.

Strengthen the impartiality of the prosecution. Improve access to justice and transparency of court proceedings. Support the penitentiary reform and probation services as well as the Prosecutors Office. Support reforms relating to civil, criminal and administrative legislation consistent with

European standards and their implementation by relevant bodies. Support the improvement of the quality of legislation and better compliance with

international legislative standards.

Assist in the elaboration of measures to combat corruption.c) Expected results

Improved independence, knowledge and efficiency of members of the judiciary (judges,prosecutors, officials within the Ministry of Justice, probation services and the penitentiarysystem) strengthening their administrative capacity and training level


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Simplified legal procedures and easier access to justice, the judiciary institutions and theOmbudsmans Office, for citizens and economic actors.



Positive assessments/progress reports by the EU and other donors on the situationconcerning democracy, the rule of law, human rights and fundamental freedoms.


Higher levels of independence demonstrated by surveys of lawyers and litigators andenhanced administrative capacities of the judiciary, as demonstrated by fewer courtcases going to appeal and ultimately being annulled by higher courts.

Increased proportion of judiciary qualified up to international standards. Increased levels of respect for human rights and fundamental freedoms, as

demonstrated by fewer reports of cases of human rights violations. Increased access for citizens to the legal system and to court proceedings. Increased confidence of citizens in the judiciary and law enforcement authorities;

Cross cutting issue: Public Finance Management Reform

Support for public administration and public finance management (PFM) reform, which is across-cutting issue, will be an integral component of all assistance programmes in the abovefocal sectors, with the overall objective of achieving transparent public finance managementand credible budget processes. Given the general weakness of PFM, this technical assistance

will be a vital complement to EU budget support for the social protection and education sectorreforms.

The main features of these actions will be as follows:

Objectives

To improve the quality and efficiency of public administration service delivery bycombating corruption and improving the management of public finances, includingdecision-making process and the use of effective financial control and external audit.

Expected results

Implementation of administrative and civil service reform concepts, including anti-ti i l t d Mi i t i d St t i


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3. Tajikistan: National Indicative Programme 2011-2013

3.1 Strategic Objectives of EU co-operation

Despite 10 years of sustained economic growth and achievements in reducing poverty levels,the main challenge for Tajikistan remains the poverty and low standards of living of the majorityof its people. According to the latest survey, 53 % of the population live below the poverty line,and Tajikistan remains the poorest country in the region.

Poverty reduction continues to be one of the priorities of the Government under the National

Development Strategy (2007-2015) and Poverty Reduction Strategy (2007-2009). A new PRS(2010-2012) is currently being developed by the Government which should reflect this priority,in particular taking into account the secondary effects of the global financial crisis of 2008.

Tajikistan has been badly hit by the global economic and financial crisis, in particular as a resultof the sharp decline in migrants remittances and export revenue. In 2008, remittance inflowsamounted to 47% of GDP, and the decline due to the contraction of the Russian and Kazakheconomy by about 40% is a severe drawback for Tajik households for whom theremittances have served as a coping mechanism. Furthermore, the global contraction of thedemand for the main export items, cotton and aluminium has led to a sharp decline in pricesand a depreciation of the somoni. These factors have led to harsh consequences on thepopulation and on the available State Budget, although growth is projected to be 2,3% in 2009.

The Government of Tajikistan has endorsed an anti-crisis action plan which will be taken intoaccount in the new PRS. In the newly adopted IMF 3-year Poverty Reduction and Growth

Facility Programme, it has undertaken to alleviate the economic impact of the crisis by raisingsocial expenditures, by introducing reforms in the agriculture sector and addressing thelongstanding issue of cotton debt. It also intends to address the governance and publicfinancial management issues, as well as improve the business environment.

These priorities are currently addressed by on-going EU programmes. Considering thecommitment of the Government to structural reforms, future EU programmes should focus, inkeeping with the approach of the CA RSP, on continuing poverty alleviation through social

protection and health reforms, including in the public finance management sector, as well aspromotion of economic development and job generation for migrants through improving thebusiness enabling environment and agricultural diversification. These measures will alsoaddress the food security risk of the population. Given the disparity of incomes in someregions, based on economic and health indicators, it will be important to target geographically


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strategy. Eventually this process should lead to agreed action plans for support to the new PRScurrently underway.

Efforts to advance structural reforms in key sectors and coordinate support to increase aideffectiveness continue to be a priority for donors and for the government. The three focalsectors chosen for future EU interventions have been selected on the basis of their value-added and complementarity, building on the results of previous EU assistance. They have alsobeen discussed with civil society, which is an important player in achieving results and progressin Tajikistan.

Social protection is high among the Tajik governments priority sectors. The current financial

crisis is already taking its toll on the Tajik economy (in the form of reduced international pricesfor aluminium and cotton and a significant reduction in annual remittances), and may have along lasting impact on the socioeconomic development of the country, where migrants arereturning and unemployment is high. The government needs to take action to improve thesocial safety nets, as more than 60% of the population live below the poverty line. Much moreneeds to be done in terms of human capital development (Health, Education, Training (VET)and Social Protection). The Government is committed to increase social expenditures, but italso needs to take drastic measures aimed at improving the efficiency of the social sectors.

The EU is committed to support

Documents

EUs CA Strategy